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China’s Policy in the Gulf Region: From Neglect to Necessity
Julian Madsen, Power & Interest News Report (PINR)
…Sino-G.C.C. relations until recently could be characterized as being generally lackluster and uneventful. This has changed, however, and in the past few years relations have flourished. Most noticeably, Beijing has rapidly widened and extended its links with the region, substantially upgrading economic ties. Arab countries are currently China’s eighth largest trading partner; the Gulf States represent the backbone of the Arab trade bloc.
…whereas oil is not the only factor behind Beijing’s thinking, the importance of energy cannot be underestimated when examining Sino-Arab relations. China is the world’s second-biggest consumer of oil and third-biggest importer. China’s oil consumption surpassed Japan’s in 2003 and now stands at 6.5 million barrels per day, compared to 20 million barrels per day for the United States.
Chinese oil demand has been rising at an astonishing rate — increasing on average per annum by more than one million barrels per day, about 40 percent of the world’s increased demand and a major influence on the record high international prices for oil. The International Energy Agency (I.E.A.) predicts that by 2030, Chinese imports will equal U.S. imports, impressing upon China the need to ensure a stable supply of oil.
…Today, 58 percent of China’s oil imports come from the Middle East, mostly from the G.C.C. states. China has adopted a strategy of geographical diversification by investing in foreign oil/gas fields in more than 20 countries including Venezuela, Nigeria and Australia.
…Conclusion
China’s global strategy, including in the Middle East, has been to avoid antagonizing the United States. Rather, China has sought — through quiet diplomacy and by boosting trade ties and creating interdependence — to present itself as an alternative and benign power with a global reach. Yet, its late arrival in the Gulf, and given the United States’ entrenched presence and unparalleled power, will prevent China from emerging as a definitive power in the Gulf for the time being. Instead, China will have to be content as a power among secondary powers such as Britain and France. For as long as China can continue to secure energy sources, expand its own exports to the region and present itself as a responsible power, time is on China’s hands.
(27 Oct 2006)
Oil city to be established in Gwadar
Khalid Mustafa, The International News (Pakistan)
ISLAMABAD: The government is all set to establish an ‘oil city’ with an investment of $40 billion at Gwadar Port to make it the biggest crude and refined oil storage base in the region, a senior government official told The News.
For this purpose, the government has allotted 12,500 acres of land in Gwadar. It will be made available on lease at nominal rates to interested parties for setting up refineries or making investment in oil logistics and storage facilities.
The official said the project would be completed in two phases. In phase-1, a ‘petrochemical city’ will be set up with an initial investment of $12.5 billion. In this city, a big refinery, along with petrochemical, oil logistics and storage complexes, will be set up. In first three years, the refinery will be able to refine 10.5 million tonnes of oil annually. The capacity of this refinery will be increased to up to 21 million tonnes in seven to nine years. The official said the Chinese Petroleum Chamber would come up with $12.5 billion investment plan for the project. In addition to it, some companies from the Middle East have also shown interest to set up refineries at Gwadar Port.
(30 Oct 2006)
See map of potential oil lines through Gwadar at
China’s pearl in Pakistan’s waters
-AF
China ready to pay more to resume work in Iraqi oil field
newKerala.com
China is willing to pay millions of extra dollars to get the exploration rights of an Iraqi oil field under a deal Beijing signed during former President Saddam Hussein’s regime.
China National Petroleum Corporation (CNPC), the country’s largest oil producer, is hopeful of resuming exploration of the Ahdab oil field after representatives from both sides discuss the issue next month, Shanghai Securities News reported.
In 1997, CNPC first signed the deal to explore Ahdab oil field which has an estimated reserve of one billion barrels.
(31 Oct 2006)
Iraq Taps Chinese Oil Companies to Double Production
Eugene Tang and Wing-Gar Cheng, Bloomberg
Iraq will invite China National Petroleum Corp. and other overseas companies to invest in oil fields to double daily production to 6 million barrels by 2012, the country’s oil minister Hussain al-Shahristani said.
“We need foreign partners to help develop new fields,” al- Shahristani said at a press conference today in Beijing. “Iraq will significantly increase its oil production in the next few years and China will significantly raise its imports. That’s why the two countries will need to work closely together.”
(28 Oct 2006)
